Key stakeholders within the beleaguered Dewan Housing Finance Corporation (DHFL), together with the consortium of bankers, unsecured collectors and potential PE buyers, are discussing the potential for a legal framework which might indemnify them from any future claims made in opposition to the corporate.
The stakeholders need protection from any litigation which could come up on account of recent claims in opposition to the corporate, particularly after PE funds have purchased stake within the firm and the resolution plan has been cleared by the bankers.
The matter has come to the fore since many mutual funds, which lent cash to DHFL, are but to get well their dues. DSP Mutual Fund has initiated legal motion in opposition to DHFL for restoration of round Rs 180 crore. Mutual funds will not be formally sure by the inter-creditor settlement, which must be mandatorily signed by banks to mark their consent to work on a resolution plan as per Reserve Bank guidelines. So claims can come up even after a resolution plan.
According to sources aware of the discussions, the potential buyers of DHFL have made it clear that within the absence of such legal protection, they would like to bid for the corporate by means of a National Company Law Tribunal (NCLT) course of. They stated that since such a course of would have the legal sanction of the NCLT, it will be free from any future legal claims in opposition to the agency.
A supply concerned within the discussions says: “Such a legal structure will provide comfort to potential buyers besides helping the lenders attract a wider participation from strategics who may have kept away — apart from PE investors AION Capital or Cerberus which have shown interest.”
A spokesperson for DHFL didn’t reply to a question on the difficulty and an e-mail to AION Capital didn’t elicit any response.
DHFL has despatched a resolution plan to the consortium of bankers. Its broad function is a request for extending credit score traces to the corporate to the tune of round Rs 1,500 crore each month in order that it may well kick-start recent lending. It additionally envisages a moratorium on repayments and that there ought to principally be no haircuts to any collectors. The plan is underneath scrutiny by the consortium of banks. As a end result, DHFL is unlikely to have the ability to pay its curiosity obligation of Rs 440 crore within the subsequent two months to secured lenders (these holding NCDs) in opposition to a principal excellent of Rs 4,770 crore.
Those concerned within the discussions say that an earlier transfer to carve out DHFL’s retail mortgage portfolio right into a separate firm and promote it to an investor was deserted as lenders weren’t eager on such a deal. As a end result, PE funds like AION are actually prepared to choose up a stake in DHFL and are additionally on the lookout for management. The firm’s promoter, Kapil Wadhawan, had hinted earlier that he can be prepared to present joint or perhaps a controlling stake with a purpose to get funds for the corporate.